Synergia Energy Regulatory News (SYN)

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Dear Shareholder,

The past year has seen many positive events in your company including significant progress in existing core projects, the addition of a very substantial new opportunity, enhancement of the Company's corporate position and resolution of all legacy and long-standing issues. The Company's primary focus is on carbon reduction and contribution to the energy transition that is currently under way globally. Our strategy has two fundamental components, the production of gas as a key transition energy source and carbon capture and sequestration ("CCS").

In India, important steps leading to the development of the known large gas resource at the Cambay Field are underway, including a farmout / funding plan which is well advanced. In addition, the Company has developed early-stage plans for a CCS scheme in India. In the UK, the Company has been awarded a CCS licence in the Southern North Sea as the result of competitive bidding in an initiative set up by the UK government.

The ability to undertake these projects is underscored by the extensive experience of the management team in the design, construction and operation of UK-based gas production and storage projects. It is further demonstrated by the partnership with Wintershall Dea in the UK CCS licence. Wintershall Dea is among the leading CCS players in the North Sea with four licences in three North Sea countries.

On the corporate side, the Company has delisted from the ASX and is now solely traded on the London AIM market. This brings into alignment the location of our assets and the location of the executive management team. The Company remains an Australian corporation subject to ASIC regulations. Indian operations are managed by an expert team of Indian nationals located in Gujarat, close to the Cambay project. The Company has appointed a new UK-based broker, Panmure Gordon, to assist the Company with achieving its short- and medium-term corporate objectives in reaching out to institutional investors to support the developing projects. Additionally, Panmure Gordon's in-house analyst will provide a third-party review of the Company and its projects.

Closing down of the legacy joint venture in Timor Leste is complete with payment of the final loan instalment now made.

The outlook for the Company is very positive with a focused strategy positioning our in-house expertise with the changing global energy and environmental requirements and opportunities.

The major shareholders of the Company, continue to provide essential support for the Company, and I am very pleased to report that Synergia Energy has a dedicated and highly experienced board of directors working closely with the executive management team who together provide the experience and direction needed for the current re-building stage of the Company.

On behalf of the Board, I wish to thank our staff, contractors, local communities, shareholders, and stakeholders for the ongoing support of the Company and I invite that continued support as we reach for realisation of value in our projects and plans.

Mr J Salomon

Non-Executive Chairman

21 September 2023

Industry Overview

Global governmental energy policies continued to evolve in an attempt to reconcile the tensions between global gas shortages caused by the Ukraine war, sustained tightening of production quotas from OPEC members combined with the overriding need to address climate change by reducing dependence on fossil fuels.

In India, the inability to compete for increasingly costly LNG imports resulted in renewed emphasis on coal-fired power generation. Although global LNG prices eased during H1 2023, the India Directorate General of Hydrocarbons continued to emphasise the need for increased indigenous gas supplies.

The increase in oil and gas prices has caused a surge in oil and gas activity, particularly in the US and Middle East. This increased activity has resulted in global shortages of drilling services and equipment and generally increased costs.

In the UK, the government reversed the previous years' antipathy towards the oil and gas sector by launching the 33rd round of exploration licensing in recognition of the importance of energy supply self-sufficiency. Conversely, the UK government imposed a windfall tax on oil and gas company profits, further reducing the attractiveness of new field development on the UK Continental Shelf.

The UK government increased its resolve to implement carbon capture and storage schemes by launching the 1st Carbon Storage Licensing Round and by pledging £20 billion of investment over the next 5 years.

Synergia Energy Strategy

The Company continued to execute two of its three strategic components:

· Focus on gas production from its Cambay, India gas field

· Development of CCS projects in the UK and India

The Company has temporarily ceased its attempt to acquire mature producing gas assets in the UKCS due to the reluctance of operators to dispose of producing gas assets in the current high gas price environment.

To reinforce its commitment to CCS activities, the Company launched its Cambay CCS scheme, the first end-to-end CCS scheme in India which has been well received by the Government of India regulators.

Cambay Field, Onshore Gujarat, India

(Synergia Energy: Operator and 100% Participating Interest)

The Cambay licence area is located onshore in the state of Gujarat in the heart of one of India's most prolific hydrocarbon provinces. It is ideally located within a major industrial corridor and approximately 20 km from the existing national gas trunk pipeline grid. India's large energy market is currently dependent on gas imports. The Cambay operation is well-positioned to partially displace the need for imported gas with indigenous gas supplies.

The Cambay field development is centred on the successful exploitation of the gas resources held in the Eocene EP-IV reservoir which extends across the field and has been penetrated by over 30 wells. The EP-IV reservoir comprises low permeability ("tight") siltstones and requires fracture stimulation to provide economic gas production rates.

Having resumed production in April 2022 after a 3.5 year hiatus, the Company has been producing both gas and condensate from two gas wells (C-77H and C-73) in addition to oil from several intermittent legacy oilwells.

Cambay C-77H Well - Trialling New Fracking Methodology and Artificial Lift

The re-fracture of the C-77H well in July 2022 has proven successful with the two new re-fracked zones having been on plateau production since September of 2022 at rates of 140-150 mscfd. This is despite the presence of a c.1500m column of gas condensate in the wellbore that inhibits gas production.

Prior to re-fracturing, the well's four fracked zones would produce for 4 to 5 days before fluid loading in the wellbore would stop production. The well would then have to be shut in for circa 1 week in order for the pressure to re-build after which the cycle was repeated. This intermittent production was an unsatisfactory basis for a full field development and attributed to a combination of less than optimum fracking methodology and absence of artificial lift to remove wellbore fluids.

The first step in installing a jet pump artificial lift solution was commenced in July 2023 to both remove gas condensate and to increase gas production. The jet pump installation is expected to be completed in September 2023. Artificial lift will be implemented on future new wells.

The successful re-fracturing operation gives the Company confidence that new wells can be drilled and fracked with initial production rates of 4-6 mmscfd in conjunction with the jet pump artificial lift.

Cambay Full Field Development

Based on the success of the C-77H well, the Company plans a full field development commencing in calendar quarter Q1 2024, subject to securing funding, to exploit the certified 205 BCF of P50 gas reserves together with the associated gas condensate.

The field development plan comprises an initial 10 new well drilling programme which will be supplemented by additional wells to fully exploit the field's reserves. All wells will be fracked incorporating artificial lift. The initial 10 wells will be drilled from the existing C‑77H drilling pad and will share a common export tie-in point and common processing facilities. Due to the anticipated (greater than 30 mmscfd) gas volumes, a new export pipeline to connect to the high-pressure gas grid will be implemented together with enhanced processing facilities and compression.

Carbon Capture and Storage ("CCS")

UK

The Company applied for two carbon storage licences under the NSTA's 1st Carbon Storage Licensing Round to complement its Medway Hub CCS project. Under this scheme, the Company plans to transport CO2 emissions from three large CCGT power stations in liquid form in special marine tankers for permanent storage in depleted fields or aquifers in the Southern North Sea. The CO2 tankers will offload liquid CO2 onto a Floating Injection, Storage and Offloading ("FISO") vessel for subsequent injection into the CO2 store via subsea manifolds. The target is to store c. 7.6 MTa (million tonnes per annum) of CO2 which would make a major contribution towards the UK's Net Zero goals.

The Company and its joint venture partner, Wintershall Dea, via its UK branch, Wintershall Dea Carbon Management Solutions UK ("Wintershall Dea"), were successful in one of its two licensing round applications, with the award of Licence CS019 covering the now depleted Camelot gas field and the overlying BC18 saline aquifer. The licence was awarded jointly with Wintershall Dea in a 50:50 partnership with Synergia as operator. Wintershall Dea has a strong corporate CCS commitment with existing projects in Norway and Denmark. The carbon storage licence has a work program that incorporates an appraisal phase comprising seismic re-processing, technical evaluations and risk assessment, and a contingent FEED study leading to a potential storage licence application in 2028, following the final investment decision ("FID"). The CS019 licence also includes a contingent appraisal well. First CO2 injection is anticipated for 2032. The Company's share of the initial work phase and FID is subject to funding, which will be addressed in due course.

India

The Company has developed the Cambay CCS scheme which comprises the transportation of CO2 from emissions from the many significant gas- and coal-fired power stations surrounding the Cambay gas field, via onshore pipeline, to a CCS hub located at the Cambay field. The CO2 would then be injected into the regionally extensive Olpad formation which underlies the Cambay Eocene gas reservoir. The initial goal is to provide a "Transportation and Storage" service to the power station emitters to sequester CO2 emissions which total circa 45 MTa from the currently targeted power stations in the proximity of the Cambay field.

The Cambay CCS scheme has been well received by key Government of India regulators but its viability is contingent on, inter alia, the development of a regulatory framework that incentivises the CO2 emitter customers. Synergia plans to assist the regulators in the development of such a framework based on its UK CCS experience.

JPDA 06-103, Timor Sea

In August 2020, on behalf of its Joint Venture Participants, Synergia Energy Ltd announced a Deed of Settlement and Release ("Deed") with the Autoridade Nacional Do Petroleo E Minerais ("ANPM"). Under the terms of the Deed, Synergia Energy committed to a settlement of US$800,000 payable up to the financial year 2024. During the year, the final instalment payable of US$250,000 was made to ANPM on 7 September 2022, thereby fully extinguishing the Group's obligations to ANPM.

To fund the settlement to ANPM, Synergia Energy entered into an unsecured loan facility agreement with two of the JPDA joint venture partners, Japan Energy E&P JPDA Pty Ltd ("JX") and Pan Pacific Petroleum (JPDA 06 103) Pty Ltd ("PPP"). The portion which was owing to PPP was fully repaid in the previous financial year in December 2021. The portion which was owing to JX was repaid in instalments during the year in August 2022, February 2023 and April 2023 with the balance of the loan from JX being US$225,355 at year-end. This balance plus interest was repaid in the Company's final repayment of US$228,324 to JX on 14 August 2023 to settle the balance of the loan to nil. The details and movement in the loan payable during the period are detailed in Note 16 to the consolidated financial statements.

On 13 October 2022, the non-defaulting parties to the JPDA joint venture agreed to terminate the Joint Operating Agreement. Synergia Energy is in the process of progressing the final closure of the joint venture accounts to conclude this matter.

Financial

Treasury Policy

The funding requirements of the Group are reviewed on a regular basis by the Group's Chief Financial Officer and reported to the Board to ensure the Group can meet its financial obligations as and when they fall due. Internal cash flow models are used to review and test investment decisions. Until sufficient operating cash flows are generated from its operations, the Group remains reliant on equity or debt funding, as well as assets divestiture or farmouts to fund its expenditure commitments.

Formal control over the Group's activities is maintained through a budget and cash flow monitoring process with annual budgets considered in detail and monitored monthly by the Board and forming the basis of the Company's financial management strategy.

Cash flows are tested under various scenarios to ensure that expenditure commitments can be met under all reasonably likely scenarios. Expenditures are also carefully monitored against the budget. The Company continues to actively develop funding options in order to meet its expenditure commitments and its planned future discretionary expenditure.

During the year, the following debt and equity capital raisings were completed to provide working capital for the Company's activities:

September 2022 quarter

· Completion of the May 2022 Placement previously arranged and announced on 4 May 2022 via the issue of 174,831,394 fully paid ordinary shares at £0.002 (A$0.0035) per share; and

March 2023 quarter

· Issue of convertible notes to the value of £650,000 (6,500 convertible notes at a face value of £100 each). See Notes 16 and 17 to the consolidated financial statements for further information on the convertible notes.

Corporate

The Company maintained a dual listing on the Australian Securities Exchange ("ASX") and the Alternative Investment Market ("AIM") of the London Stock Exchange ("LSE") up until the Company's delisting on the ASX on 30 December 2022. After the Company's delisting on the ASX the Company's shares remain publicly traded on AIM.

As at 30 June 2023 the Company had:

· Available cash resources of A$938,589;

· Borrowings (excluding derivative liability component of convertible notes) of A$774,666 (refer to Note 16 to the consolidated financial statements);

· Derivative liabilities (from convertible notes) of A$1,050,334 (refer to Note 17 to the consolidated financial statements); and

· Issued capital of 8,417,790,704 fully paid ordinary shares and 449,928,560 unlisted options.

Executive and Board Changes

On 29 June 2023, Mr. Joe Salomon, the previous Executive Chairman, moved into the role of Non-Executive Chairman. There were no other board changes during the year.

Risk Management

The full Board undertakes the function of the Audit and Risk Committee and is responsible for the Group's internal financial control system and the Company's risk management framework. Management of business risk, particularly exploration, development and operational risk is essential for success in the oil and gas business. The Group manages risk through a risk identification and risk management system.

Health, Safety, Security and Environment

Synergia Energy is committed to protecting the health and safety of everybody who plays a part in our operations or lives in the communities where we operate. Wherever we operate, we will conduct our business with respect and care for both the local and global, natural and social environment and systematically manage risks to drive sustainable business growth. We will strive to eliminate all injuries, occupational illness, unsafe practices and incidents of environmental harm from our activities. The safety and health of our workforce and our environmental stewardship are just as important to our success as operational and financial performance and the reputation of the Company.

Synergia Energy respects the diversity of cultures and customs that it encounters and endeavours to incorporate business practices that accommodate such diversity and that have a beneficial impact through our working involvement with local communities. We strive to make our facilities safer and better places in which to work and our attention to detail and focus on safety, environmental, health and security issues will help to ensure high standards of performance. We are committed to a process of continuous improvement in all we do and to the adoption of international industry standards and codes wherever practicable. Through implementation of these principles, Synergia Energy seeks to earn the public's trust and to be recognised as a responsible corporate citizen.

(1) The NSTA granted the CS019 licence for the Camelot area to Synergia Energy CCS Limited and its 50% joint venture partner, Wintershall Dea Carbon Management Solutions UK, with Synergia Energy CCS Limited as operator. The licence was effective from 1 August 2023 (after year-end).

For the Year Ended 30 June 2023

The directors of Synergia Energy Ltd present their report (including the Remuneration Report) together with the consolidated financial statements of the group comprising Synergia Energy Ltd (the "Company" or "Synergia Energy") and its subsidiaries (together collectively referred to as the "Group") for the financial year ended 30 June 2023 and the auditors' report thereon. Unless otherwise indicated, the directors' report is presented in Australian dollars ("$" or "A$"), which is the Company's functional and presentation currency (see Note 2(e) of the Notes to the Consolidated Financial Statements).

DIRECTORS

The directors of Synergia Energy Ltd in office at any time during or since the end of the financial year are:

Mr Jonathan Salomon (B App Sc (Geology), GAICD)

(Executive Chairman until moved to Non-Executive Chairman role on 29 June 2023)

Mr Salomon was appointed as a Non-Executive Director in November 2015, Managing Director on 18 March 2016, and Interim Chairman on 5 May 2020. Mr Salomon continued as Managing Director and Interim Chairman until he was appointed as Executive Chairman on 16 June 2021. On 29 June 2023 Mr Salomon moved to a Non-Executive Chairman role.

Mr Salomon has a Bachelor Degree in Applied Science and is a member of the American Association of Petroleum Geologists and the Society of Petroleum Engineers, and has over 37 years of experience working for upstream energy companies. Mr Salomon has worked for a number of oil and gas companies in various senior positions including General Manager Exploration and New Ventures at Murphy Oil Corporation and Global Head of Geoscience at RISC PL, in addition to a number of Executive Director roles including Strategic Energy Resources, Norwest Energy and Nido Petroleum. At several times in his career, Mr Salomon has acted as an independent consultant for various oil and gas companies, including New Standard Energy and Pacrim Energy. Mr Salomon first worked on Indian projects in 1994 while at Ampolex and since that time has maintained a connection with the Indian industry, at various times bidding in India's exploration and field development rounds and working with Indian companies as joint venture partners, both in India and internationally.

During the last three financial years and up to the date of this report, Mr Salomon has not been a director of any other listed companies.

Mr Roland Wessel

(Chief Executive Officer and Director)

Mr Wessel was appointed Chief Executive Officer and Director on 16 June 2021. Mr Wessel is a geologist with over 40 years' experience in all of the world's major oil and gas regions. Further details of Mr Wessel's qualifications and experience can be found in the Executive Management section of the Directors' Report.

During the last three financial years and up to the date of this report, Mr Wessel has not been a director of any other listed companies.

Mr Colin Judd

(Chief Financial Officer and Director)

Mr Judd was appointed as Chief Financial Officer on 1 July 2021 and as Director on 27 January 2022. Mr Judd is a chartered accountant with over 40 years' experience in corporate financial management. Further details of Mr Judd's qualifications and experience can be found in the Executive Management section of the Director's Report.

During the last three financial years and up to the date of this report, Mr Judd has not been a director of any other listed companies.

Mr Mark Bolton (B Business)

(Non-Executive Director)

Mr Bolton was appointed Chief Financial Officer and Company Secretary on 3 June 2016, and as Executive Director on 26 March 2020. Mr Bolton continued as Chief Financial Officer until 1 July 2021 transitioning to a Non-Executive Director. Mr Bolton resigned as Company Secretary on 25 August 2021.

Mr Bolton has significant experience in the resource sector in Australia, having worked as Chief Financial Officer and Company Secretary for a number of resource companies since 2003. Prior to this, Mr Bolton worked with Ernst & Young as an Executive Director in Corporate Finance. Mr Bolton has experience in the areas of commercial management and the financing of resource projects internationally. He also has extensive experience in capital and equity markets in a number of jurisdictions including ASX, AIM and the TSX. Mr Bolton has significant experience in the development and financing of new resources projects, particularly in emerging economies.

Mr Bolton is the Managing Director of Panthera Resources PLC (AIM:PAT) and a Non-Executive Director of West Cobar Metals Limited (ASX:WC1). During the last three financial years and up to the date of this report, Mr Bolton has not been a director of any other listed company.

Mr Paul Haywood

(Non-Executive Director)

Mr Haywood was appointed as a Non-Executive Director in May 2017. Mr Haywood has over 19 years of international experience in delivering value for his investment network through a blended skill set of corporate and operational experience, including more than six years in the Middle East, building early stage and growth projects. More recently, Mr Haywood has held senior management positions with UK and Australian public companies in the natural resource and energy sectors including oil and gas exploration and development in UK, EU and Central Asia. Mr Haywood's expertise stretches across UK and Australian public markets, with a cross-functional skill set encompassing research, strategy, implementation, capital and transactional management. Mr Haywood is currently Chief Executive Officer of Block Energy Plc.

Mr Haywood is the Director and CEO of Block Energy plc (AIM:BLOE). During the last three financial years and up to the date of this report, Mr Haywood has not been a director of any other listed companies.

Mr Peter Schwarz (B Sc (Geology), M Sc (Petroleum Geology))

(Non-Executive Director)

Mr Schwarz was appointed as a Non-Executive Director in September 2019. A former director of BG Exploration and Production Limited and CEO of independent exploration company Virgo Energy Ltd, Mr Schwarz is an AAPG Certified Petroleum Geologist and business development professional with over 45 years' experience in the oil and gas industry. Mr Schwarz has previously held various senior management roles with Amerada Hess, BG, and Marubeni and is currently a director of Finite Energy Limited, an oil and gas consultancy business he founded over 15 years ago, specialising in strategy and business development advice in the UK and Europe.

During the last three financial years and up to the date of this report, Mr Schwarz has not been a director of any other listed companies.

COMPANY SECRETARY

Ms Lisa Wynne was the Company Secretary from the beginning of the financial year until 28 September 2022, and Mr Jack Rosagro was the Company Secretary from 28 September 2022 to 8 September 2023. Synergia Energy's current Company Secretary, Ms Anshu Raghuvanshi was appointed on 8 September 2023.

Ms Raghuvanshi leads the company secretarial services for Computershare Governance Services, Melbourne, Australia. She has over 12 years' experience in company secretarial roles, working with listed companies to ensure their compliance with annual and ad-hoc reporting, and to guide them in their governance processes. Ms Raghuvanshi supports clients with the administration of their board, committee, and annual general meetings, including notices, agendas and minutes.

CORPORATE GOVERNANCE STATEMENT

In establishing its corporate governance framework, the Company (during the year up to March 2023) referred to the recommendations set out in the ASX's Corporate Governance Council's Corporate Governance Principles and Recommendations (4th Edition) ("Principles"). From March 2023, the Company adopted the recommendations of the Quoted Companies Alliance Corporate Governance Code for Small and Mid-Size Quoted Companies ("QCA Code").

To the extent they are applicable to the Company, and to the extent possible, the Board considers that the Company has complied with each recommendation of the Principles and the QCA Code during the year.

The Company's Corporate Governance Statement, which reports on Synergia Energy's key governance principles and practices, and provides detailed information on the Board and committee structure, diversity and risk management, is available on the Synergia Energy website in the "Corporate Governance" section (see https://www.synergiaenergy.com/about-us/corporate-governance).

DIRECTORS' MEETINGS

Directors in office and directors' attendance at meetings during the financial year ended 30 June 2023 are as follows:

(1) The full Board performs the role of the Audit and Risk Committee. The Company does not have a Nomination Committee.

(2) Held indicates the number of meetings available for attendance by the director during the tenure of each director.

(3) Mr Salomon moved to a Non-Executive Chairman role from 29 June 2023.

EXECUTIVE MANAGEMENT

Mr Roland Wessel

(Chief Executive Officer and Director)

Mr Wessel was appointed as Chief Executive Officer and Director on 16 June 2021. Mr Wessel is a geologist with over 40 years' experience in all of the world's major oil and gas regions. Mr Wessel founded and built Star Energy, the UK onshore operator of 25 oil and gas fields, through to its listing on AIM in 2004 and its sale to Petronas in 2008. During its evolution, Star Energy grew rapidly through acquisitions and diversification, culminating in it becoming a major gas storage developer and operator. During his career, Mr Wessel has founded and managed a drilling services company and has developed and patented several key oilfield technologies. He has extensive experience in both project and corporate management.

Mr Colin Judd

(Chief Financial Officer and Director)

Mr Judd was appointed as Chief Financial Officer on 1 July 2021 and as Director on 27 January 2022. Mr Judd qualified as a chartered accountant with Price Waterhouse in 1979, where he fulfilled various professional accounting positions in the UK, Europe and the Far East. Mr Judd joined Christian Salvesen plc in 1987, undertaking senior financial management roles culminating in the position of European Financial Controller. In 1994, Mr Judd moved to Aberdeen where he undertook Chief Financial Officer roles for two private-equity-backed oil service businesses. In 1999, Mr Judd joined Star Energy Limited as a founder member and Chief Financial Officer and was instrumental in the company's successful listing on AIM in 2004, various subsequent share placings and the company's ultimate sale to Petronas. Mr Judd cofounded Trans European Oil & Gas Limited, a company backed by KKR, with the strategy to develop a pan-European oil and gas business.

Mr Ashish Khare(Bachelor of Engineering (BE in Chemical Engineering, including Petroleum Management))

(Head of India Assets)

Mr Khare was appointed Head of India Assets on 8 November 2016 and is based in India. Mr Khare has over 22 years of experience in the petroleum industry. Mr Khare's area of expertise include upstream oil and gas, as well as midstream and downstream project implementation and operations management. Mr Khare originally worked for Synergia Energy Ltd as GM Operations & Business Development; and has experience working for various Indian companies including Cairn India Ltd and Reliance Petroleum.

PRINCIPAL ACTIVITIES

The principal activities of the consolidated entity during the financial year included:

· exploration for oil and gas;

· appraisal and development of oil and gas prospects; and

· production and sale of oil and gas.

The Group is now also focused on carbon-neutral gas production and aims to become a major contributor to CO2 emission reduction by developing CCS projects, leveraging the extensive management experience in this sector.

There were no other significant changes in the nature of the activities during the year.

OPERATING RESULTS

The Group incurred a consolidated loss after income tax of A$5,382,902 for the year (2022: loss of A$2,061,924)

During the year, production continued on the Cambay field together with oil and gas sales following recommencement of production which happened in the previous financial year in April 2022. Gas sales during the year amounted to A$755,589 (2022: A$141,435) and oil sales amounted to A$540,561 (2022: A$nil), providing total revenues of A$1,296,150 during the year (2022: A$141,435). Cost of sales including production costs incurred during the year amounted to A$2,563,873 (2022: A$754,365), which included re-fraccing costs of A$1,850,924 (2022: A$687,184). This resulted in the Group incurring a gross loss of A$1,267,723 during the year (2022: A$612,930).

The prior year results included care and maintenance expenditure of A$441,338 (which included re‑fraccing costs of A$335,717). There was no care and maintenance expenditure during the current year due to the recommencement of production in April 2022.

During the year, A$34,853 of expected credit losses ("ECLs") was reversed (2022: A$3,131,282 reversed). The 2022 ECLs reversed included A$3,187,168 of ECLs relating to the share of balances directly receivable from the Cambay operation to the Group, which were reversed as part of the Cambay Acquisition which occurred during the previous financial year ended 30 June 2022.

Net finance costs of A$769,981 (2022: A$377,812) includes interest from the unwinding of discount on the Group's site restoration provision which increased to A$289,540 (2022: A$76,753), interest expense from the Group's loan from JX which increased to A$54,525 (2022: A$19,836), interest expense from the Group's convertible note (debt component) of A$19,178 (2022: A$nil) and a loss of A$227,668 (2022: A$nil) resulting from the fair value revaluation of the derivative liability component of the Group's convertible note.

FINANCIAL POSITION

The net assets of the Group totalled A$10,337,516 at 30 June 2023 (2022: A$14,583,598) and included the following balances:

· Cash and cash equivalents of A$938,589 (2022: A$4,838,459);

· Borrowings (excluding derivative liability component of convertible notes) of A$774,666 (2022: A$451,355); and

· Derivative liabilities (from convertible notes) of A$1,050,334 (2022: A$nil).

DIVIDENDS

No dividend was paid or declared during the year and the directors do not recommend the payment of a dividend.

REVIEW OF OPERATIONS

A review of the operations of the Group during the financial year and the results of those operations are set out in the Review of Operations on pages 3 to 7 of this report.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

The Review of Operations details those changes that have had a significant effect on the Group.

Other than those matters, there have been no other significant changes in the state of affairs of the Group that occurred during the financial year.

LIKELY DEVELOPMENTS

Additional comments on expected results on operations of the Group are included in the Review of Operations on pages 3 to 7.

Further disclosure as to likely developments in the operations of the Group and expected results of those operations have not been included in this report as, in the opinion of the Board, these would be speculative and as such, disclosure would not be in the best interests of the Group.

ENVIRONMENTAL ISSUES

The Group's oil and gas exploration and production activities are subject to environmental regulation under the legislation of the respective states and countries in which they operate. The majority of the Group's activities involve low level disturbance associated with its drilling programmes and production from existing wells. The Board actively monitors compliance with these regulations and as at the date of this report is not aware of any material breaches in respect of these regulations.

The Group also has an active program of education, monitoring and reporting within the Group's business to identify and mitigate any other environmental risks.

SIGNIFICANT EVENTS AFTER BALANCE DATE

On 27 July 2023, the Group submitted a bank guarantee of US$124,000 relating to the Cambay field. A further US$124,000 is expected to be submitted in calendar Q1 2024. See Note 19 to the notes to the consolidated financial statements for further details on the bank guarantee.

Effective on 1 August 2023, the NSTA granted the CS019 licence for the Camelot area to Synergia Energy CCS Limited and its 50% joint venture partner, Wintershall Dea, with Synergia Energy CCS Limited as operator.

On 7 August 2023, the Company issued 704,545,454 shares at £0.0011 (A$0.0021) per ordinary share pursuant to the placement announced on 25 July 2023. As part of this placement, the Company will also be issuing 13,636,363 unquoted options (exercisable at £0.0011 and expiring on 31 July 2026) to Novum Securities Limited ("Novum"), pursuant to the capital raising advisory agreement relating to this placement. These options are expected to be issued in the coming months.

On 10 August 2023, the Company made its final repayment to JX of US$228,324, settling the Company's liability payable to JX to nil.

There were no other significant subsequent events occurring after the year-end.

CAPITAL STRUCTURE AND TREASURY POLICY

As at 30 June 2023 the Group had unsecured loans, excluding the derivative liability component of convertible notes, at face value A$774,666 (2022: A$451,355). Refer to Note 16 of the Consolidated Financial Statements for details of the carrying amount, terms and conditions, repayment schedule, and options attached to the loans.

The Group's balance of the derivative liability component of convertible notes at 30 June 2023 is A$1,050,334 (refer to Note 17 to the consolidated financial statements).

Details of transactions involving ordinary shares during the financial year are as follows:

As at the date of this report the Company had a total issued capital of 9,122,336,158 ordinary shares (following a placement completed in August 2023) and 449,928,560 unlisted options exercisable at weighted average price of £0.0019 (A$0.0037) per option.

DIRECTORS' INTERESTS

The relevant interest of each director in shares and unlisted options issued by the Company at the date of this report is as follows:

(1) 88,311,688 options exercisable at £0.0022, expiring 12 August 2027. Two thirds (2/3) of these options were exercisable at reporting date; and

8,315,217 options exercisable at nil cost, expiring 1 April 2028. All of these options were exercisable at reporting date.

(2) 136,363,636 options exercisable at £0.0022, expiring 12 August 2027. Two thirds (2/3) of these options were exercisable at reporting date; and

27,272,727 options exercisable at nil cost, expiring 1 April 2028. All of these options were exercisable at reporting date.

(3) 100,000,000 options exercisable at £0.0022, expiring 12 August 2027. Two thirds (2/3) of these options were exercisable at reporting date; and

18,200,000 options exercisable at nil cost, expiring 1 April 2028. All of these options were exercisable at reporting date.

SHARE OPTIONS

Unissued Shares under Option

At the date of this report, unissued ordinary shares of the Company under option (with an exercise price) are:

These options do not entitle the holder to participate in any share issue of the Company or any other body corporate.

Unissued Shares under Option that Expired

During or since the end of the financial year, the following unlisted options expired:

Shares Issued on Exercise of Unlisted Options

No ordinary shares were issued, during or since the end of the financial year, as a result of the exercise of unlisted options.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

During the financial year, the Group paid a premium in respect of insurance cover for the directors and officers of the Group. The Group has not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the directors' liability and legal expense insurance contracts, as such disclosure is prohibited under the terms of the insurance contract.

PROCEEDINGS ON BEHALF OF THE COMPANY

No proceedings have been brought on behalf of the Company, nor has any application been made in respect of the Company under Section 237 of the Corporations Act 2001.

NON-AUDIT SERVICES

The Company may decide to employ the Auditor on assignments additional to their statutory audit duties where the Auditor's expertise and experience with the Group is important.

The Board has considered the non-audit services provided during the year and is satisfied that the provision of the non-audit services is compatible with, and did not compromise, the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

· all non-audit services were subject to the corporate governance procedures adopted by the Group and these have been reviewed by the Board to ensure they do not impact the impartiality and objectivity of the auditor; and

· the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and rewards.

Refer Note 28 of the Consolidated Financial Statements for details of the amounts paid to the auditors of the Group, PKF Perth and their network firms for audit and non-audit services provided during the year.

ROUNDING OF AMOUNTS

The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191 and therefore the amounts contained in this report and in the financial report have been rounded to the nearest dollar, unless otherwise indicated.

LEAD AUDITOR'S INDEPENDENCE DECLARATION

The Lead Auditor's Independence Declaration for the year ended 30 June 2023 has been received and can be found on page 29.

REMUNERATION REPORT - AUDITED

On 24 November 2021, the Board established a Remuneration Committee, in accordance with the Company's Remuneration Committee Charter, comprising Messrs Paul Haywood (Independent Chair), Peter Schwarz (Independent Non-Executive Director) and Mark Bolton (Non-Independent Non-Executive Director).The Remuneration Committee is responsible for the review and recommendation to the Board, of the Company's Remuneration Policy, senior executives' remuneration and incentives, the remuneration framework for directors, superannuation arrangements, incentive plans and remuneration reporting.

1. PRINCIPLES OF COMPENSATION

Remuneration is referred to as compensation throughout this report. The Remuneration Report explains the remuneration arrangements for directors and senior executives of Synergia Energy Ltd who have authority and responsibility for planning, directing and controlling the activities of the Group (key management personnel). 

The compensation structures explained below are designed to attract, retain and motivate suitably qualified candidates, reward the achievement of strategic objectives and achieve the broader outcome of the creation of value for shareholders. The compensation structures take into account:

· the capability and experience of the key management personnel;

· the ability of key management personnel to control the performance of the relevant segments;

· the current downturn and uncertainty within the resources industry;

· the Company's performance including:

o the Group's earnings; and

o the growth in share price and delivering constant returns on shareholder wealth;

· exploration success; and

· development of projects.

Compensation packages include a mix of fixed compensation and long-term performance-based incentives. In specific circumstances, the Group may also provide short-term cash incentives based upon the achievement of Company performance hurdles or in recognition of specific achievements.

1.1 Fixed Compensation

Fixed compensation consists of base compensation and employer contributions to superannuation funds. Compensation levels are reviewed annually through a process that considers individual, sector and overall performance of the Group. In addition, reviews of available data on oil and gas industry companies provide comparison figures to ensure the directors' and senior executives' compensation is competitive in the market. 

Remunerations for Executive, Non-Executive Directors and staff members impacted were reviewed early in the 2022 financial year. Remuneration increases were implemented for certain individuals with effect from 1 September 2021.

Compensation for senior executives is separately reviewed at the time of promotion or initial appointment.

1.2 Performance Linked Compensation

Performance linked compensation includes both short-term and long-term incentives designed to reward key management personnel for growth in shareholder wealth. The short-term incentive ("STI") is an "at risk" bonus provided in the form of cash or shares, while the long-term incentive plan ("LTI") is used to reward performance by granting options over ordinary shares of the Company.

Short-Term Incentives

The Group has introduced a short-term incentive scheme for key management personnel with effect from 1 January 2022.

The short-term incentive scheme has been designed by the Remuneration Committee and approved by the Board, having regard to the business plans as well as the achievement of performance targets as determined by the Board. These targets include a combination of key strategic, financial and personal performance measures which have a major influence over company performance in the short term.

On 3 April 2023, the Company issued unlisted nil-cost options over 70,043,152 shares as a non-cash settlement of amounts due to the Company's three executive directors and the Head of India Assets in accordance with the Company's short-term incentive plan and recommendations by the Company's Remuneration Committee for the 12-month period ended 31 December 2022. The options are fully vested with the holder on 3 April 2023; and are exercisable on or before 1 April 2028.

Long-Term Incentives

On 13 July 2022, following shareholder approval, the Company released its Employee Incentive Plan. The shareholders approved the issue of up to a maximum of 388,559,703 shares under the Company's Employee Incentive Plan.

The primary objectives of the Employee Incentive Plan are to:

· establish a method by which eligible participants can participate in the future growth and profitability of the Company;

· to provide an incentive and reward for eligible participants for their contribution to the Company; and

· attract and retain a high standard of managerial and technical personnel for the benefit of the Company.

Under the Employee Incentive Plan, an award (i.e. options or performance rights, etc.) may be awarded to an eligible participant.

The Board, at its sole and absolute discretion, may invite an eligible person selected by it to complete an application relating to a specified number of awards allocated to that eligible person by the Board. The Board may offer an award (as applicable) to any eligible person it elects and determine the extent of that person's participation in the Employee Incentive Plan (Participant).

An offer by the Board is required to specify, among other things, the type of award offered, the date and total number of awards granted, the exercise price and exercise period and any other matters the Board determines necessary, including the exercise conditions and disposal restrictions attaching to the awards.

At the General Meeting held on 13 July 2022, the shareholders approved the issue of 324,675,324 unlisted options as long term incentives to the Executive Directors. The options are to vest with the holder over a period of three (3) years, commencing on 1 July 2021. The Company issued the 324,675,324 unlisted options on 12 August 2022. No other long-term incentives were issued to senior executives or staff during the year ended 30 June 2023.

1.3 Non-Executive Directors

Total compensation for all Non-Executive Directors is based on a comparison with external data with reference to fees paid to Non-Executive Directors of comparable companies. Directors' fees cover all main Board activities and membership of committees, if applicable.

The annual fee for Mr Salomon has been set at A$105,000 plus statutory superannuation per annum effective from the date of his appointment as Non-Executive Chairman on 29 June 2023.

The annual fee for Mr Bolton was set at A$55,381 plus statutory superannuation per annum effective from 1 July 2021 when he was appointed as Non-Executive Director and remains unchanged.

The annual fee for Mr Haywood, the Company's UK based Non-Executive Director was set at £30,000 per annum on commencement in May 2017 and remains unchanged.

The annual fee for Mr Schwarz, the Company's UK based Non-Executive Director was set at £30,000 per annum on commencement in September 2019 and remains unchanged.

The aggregate maximum fixed annual amount of remuneration available for Non-Executive Directors of A$500,000 per annum was approved by Shareholders on 9 November 2011.

In addition to the fixed component, the Company can remunerate any director called upon to perform extra services or undertake any work for the Company beyond their general duties. This remuneration may either be in addition to, or in substitution for, the director's share of remuneration approved by Shareholders.

1.4 Clawback Policy

The Board has adopted the following Clawback Policy applicable from August 2015.

In relation to circumstances where an employee acts fraudulently or dishonestly, or wilfully breaches his or her duties to the Company or any of its subsidiaries, the Board has adopted a clawback policy in relation to any cash performance bonuses (including deferred share awards) or LTIs. The Board reserves the right to take action to reduce, recoup or otherwise adjust an employee's performance based remuneration in circumstances where in the opinion of the Board, an employee has acted fraudulently or dishonestly or wilfully breached his or her duties to the Company or any of its subsidiaries. The Board may:

· deem any bonus payable, but not yet paid, to be forfeited;

· require the repayment by the employee of all or part of any cash bonus received;

· determine that any unvested and/or unexercised LTIs will lapse;

· require the repayment of all or part of the cash amount received by the employee following vesting and subsequent sale of a LTI;

· reduce future discretionary remuneration to the extent considered necessary or appropriate to take account of the event that has triggered the clawback;

· initiate legal action against the employee; and/or

· take any other action the Board considers appropriate.

1.5 Remuneration Consultants

There were no remuneration recommendations made in relation to key management personnel by remuneration consultants in the financial year ended 30 June 2023.

1.6 Adoption of year ended 30 June 2022 Remuneration Report

At the AGM held 23 November 2022 shareholders adopted the 30 June 2022 Remuneration Report with a clear majority of 1,458,204,495 votes in favour, being 99.90% of the votes cast.

2. EMPLOYMENT CONTRACTS

The following table summarises the terms and conditions of contracts between key executives and the Company:

(1) The Company may terminate the contract immediately if serious misconduct has occurred. In this case the termination payment is only the fixed remuneration earned until the date of termination and any unvested options will immediately be forfeited.

(2) Mr Salomon was the Executive Chairman until he moved to the Non-Executive Chairman role on 29 June 2023. There were no changes to the terms of Mr Salomon's employment, as listed above, upon his move to the Non-Executive Chairman role.

3. DIRECTORS' AND EXECUTIVE OFFICERS' REMUNERATION

Details of the nature and amount of each major element of remuneration of each director of the Company and other key management personnel of the consolidated entity are:

The Directors and Executives of the Company may be Directors or Executives of the Company's subsidiaries. No remuneration is received for directorships of subsidiaries. All key management personnel other than Mr Wessel, Mr Judd and Mr Khare are employed by the parent entity.

Refer to the following explanatory notes for additional information.

Notes in Relation to Directors' and Executive Officers' Remuneration

(1) Benefits, including non-monetary include relocation costs and related expenses, as well as minor benefits, such as payments on behalf of employees considered personal, insurance premiums, car parking and any associated fringe benefits tax.

(2) Includes, where applicable, accrued employee leave entitlement movements.

(3) At the General Meeting held on 13 July 2022, the shareholders approved the issue of 324,675,324 unlisted options as long term incentives to the Executive Directors. The options are to vest with the holder over a period of three (3) years, commencing on 1 July 2021. The Company issued the 324,675,324 unlisted options on 13 July 2022. No other long-term incentives were issued to senior executives or staff during the year ended 30 June 2023.

On 3 April 2023, the Company issued unlisted nil-cost options over 70,043,152 shares as a non-cash settlement of amounts due to the Company's three executive directors and the Head of India Assets in accordance with the Company's short-term incentive plan and recommendations by the Company's Remuneration Committee for the 12-month period ended 31 December 2022. The options are fully vested with the holder on 3 April 2023; and are exercisable on or before 1 April 2028.

Further details of the terms and conditions of the options is included in section 4.2.

(4) The options issued as long-term incentives to the Executive Directors are not linked to the performance of the Group.

Fees for Non-Executive Directors are not linked to the performance of the Group.

(5) Mr Bolton resigned as Executive Director and Chief Financial Officer and was appointed as Non‑Executive Director on 1 July 2021, with his annual remuneration negotiated to A$55,381 plus statutory superannuation per annum effective from this date.

(6) Mr Haywood was appointed a Non-Executive Director on 29 May 2017. Mr Haywood is based in the United Kingdom and is paid £30,000 per annum. The amount disclosed is converted into Australian dollars at the applicable exchange rate at the date of payment.

(7) Mr Schwarz was appointed a Non-Executive Director on 4 September 2019. Mr Schwarz is based in the United Kingdom and is paid £30,000 per annum. The amount disclosed is converted into Australian dollars at the applicable exchange rate at the date of payment.

(8) Mr Salomon was appointed Managing Director in March 2016 with an initial fixed annual remuneration of A$350,000 per annum, inclusive of statutory superannuation, which was reduced to A$271,950 inclusive of statutory superannuation effective from 1 October 2016, following the implementation of cost reductions by the Company. A reduction in Mr Solomon's working hours to further reduce costs was implemented on 1 April 2020. Mr Salomon was appointed as Interim Chairman on 5 May 2020 and continued as Managing Director and Interim Chairman until he was appointed as Executive Chairman on 16 June 2021. His annual remuneration was renegotiated to A$170,100 effective from 1 September 2021.

Mr Salomon was appointed as Non-Executive Chairman on 29 June 2023. His annual remuneration was renegotiated to A$105,000 plus superannuation, effective from his date of appointment for this new role.

On 12 August 2022, the Company issued 88,311,688 unlisted options as a long-term incentive to Mr Salomon, following approval by shareholders at the General Meeting held on 13 July 2022. Two-thirds of the unlisted options were vested as at 30 June 2023.

On 3 April 2023, the Company issued unlisted nil-cost options over 8,315,217 shares to Mr Salomon as part a non-cash settlement of amounts due to the Company's three executive directors and the Head of India Assets in accordance with the Company's short-term incentive plan and recommendations by the Company's Remuneration Committee for the 12-month period ended 31 December 2022. The options were fully vested on 3 April 2023.

Further details of the terms and conditions of the options is included in section 4.1.

(9) Mr Wessel was appointed as Chief Executive Officer and Director on 16 June 2021 at a fixed annual remuneration of £150,000 per annum, plus 14% UK National Insurance.

On 12 August 2022, the Company issued 136,363,636 unlisted options as a long-term incentive to Mr Wessel, following approval by shareholders at the General Meeting held on 13 July 2022. Two-thirds of the unlisted options were vested as at 30 June 2023.

On 3 April 2023, the Company issued unlisted nil-cost options over 27,272,727 shares to Mr Wessel as part a non-cash settlement of amounts due to the Company's three executive directors and the Head of India Assets in accordance with the Company's short-term incentive plan and recommendations by the Company's Remuneration Committee for the 12-month period ended 31 December 2022. The options were fully vested on 3 April 2023.

Further details of the terms and conditions of the options is included in section 4.1.

(10) Mr Judd was appointed as Chief Financial Officer on 1 July 2021 and Executive Director on 27 January 2022 at fixed annual remuneration of £110,000 per annum, plus 14% UK National Insurance.

On 12 August 2022, the Company issued 100,000,000 unlisted options as a long-term incentive to Mr Judd, following approval by shareholders at the General Meeting held on 13 July 2022. Two-thirds of the unlisted options were vested as at 30 June 2023.

On 3 April 2023, the Company issued unlisted nil-cost options over 18,200,000 shares to Mr Judd as part a non-cash settlement of amounts due to the Company's three executive directors and the Head of India Assets in accordance with the Company's short-term incentive plan and recommendations by the Company's Remuneration Committee for the 12-month period ended 31 December 2022. The options were fully vested on 3 April 2023.

Further details of the terms and conditions of the options is included in section 4.1.

(11) Mr Khare became key management personnel on 8 November 2016 and is based in India. The amount paid during the year ended 30 June 2021 reflects the reduced working hours implemented 1 October 2017 to facilitate a 20% reduction in salaries together with a further reduction in working hours which was implemented on 1 May 2020. Mr Khare's terms and conditions of employment were revised with effect from 1 September 2022, which included an ex-gratia joining bonus of INR 595,546 (A$10,929) as a full time employee (previously engaged as a consultant from 1 May 2020); with a subsequent revision to his remuneration effective on 1 April 2023. Mr Khare's remuneration has been converted from Indian Rupees at the average exchange rate for the year.

On 3 April 2023, the Company issued unlisted nil-cost options over 16,255,208 shares to Mr Khare as part a non-cash settlement of amounts due to the Company's three executive directors and the Head of India Assets in accordance with the Company's short-term incentive plan and recommendations by the Company's Remuneration Committee for the 12-month period ended 31 December 2022. The options were fully vested on 3 April 2023.

Further details of the terms and conditions of the options is included in section 4.1.

Analysis of Bonuses Included in Remuneration

There were no short-term incentive cash bonuses awarded as remuneration to key management personnel during the financial year.

4. Equity Instruments

All rights and options refer to rights and unlisted options over ordinary shares of the Company, which are exercisable on a one-for-one basis.

4.1 Rights and Options Over Equity Instruments Granted as Compensation

a) At the General Meeting held on 13 July 2022, shareholders approved the issue of:

· 88,311,688 options to Mr Salomon (and/or his nominee(s));

· 136,363,636 options to Mr Wessel (and/or his nominee(s)); and

· 100,000,000 options to Mr Judd (and/or his nominee(s)).

The above options were issued on 12 August 2022, with one third (1/3) of the options vesting on 30 June 2022, one third (1/3) of the options vesting on 30 June 2023 and one third (1/3) of the options vesting on 30 June 2024. The fair value of the options issued to the Executive Directors were calculated at A$0.0016 each using the Black-Scholes valuation model, based on the following inputs:

Based on the above, the value of the options granted to the Executive Directors, as well as the number and percentages of options vested (or otherwise) were as follows:

b) On 3 April 2023, the Company issued unlisted nil-cost options over 70,043,152 shares as a non-cash settlement of amounts due to the Company's three executive directors and the Head of India Assets in accordance with the Company's short-term incentive plan and recommendations by the Company's Remuneration Committee for the 12-month period ended 31 December 2022; as follows:

· 8,315,217 options to Mr Salomon (and/or his nominee(s));

· 27,272,727 options to Mr Wessel (and/or his nominee(s));

· 18,200,000 options to Mr Judd (and/or his nominee(s)); and

· 16,255,208 options to Mr Khare (and/or his nominee(s)).

The above options were issued as fully-vested on 3 April 2023. The fair value of the options issued to the Executive Directors and Head of India Assets were calculated at A$0.0017 each using the Black-Scholes valuation model, based on the following inputs:

Based on the above, the value of the options granted to the Executive Directors and Head of India Assets, as well as the number and percentages of options vested (or otherwise) were as follows:

4.2 Rights and Options Over Equity Instruments Granted as Compensation Granted Since Year End

No other rights and options over ordinary shares in the Company were granted as compensation to key management personnel and executives since the end of the financial year.

4.3 Modification of Terms of Equity-Settled Share-based Payment Transactions

No terms of equity-settled share-based payment transactions (including options granted as compensation to key management personnel) have been altered or modified by the issuing entity during the financial year.

4.4 Exercise of Options Granted as Compensation

During the financial year no shares were issued on the exercise of options previously granted as compensation.

4.5 Details of Equity Incentives Affecting Current and Future Remuneration

There are no rights or options currently held by key management personnel at year end other than those disclosed above in Section 1.4 (2022: nil).

Details of the terms of the options, the value of the options as well as the number of options vested during the year are detailed in Section 4.1.

4.6 Analysis of Movements in Equity Instruments

There were no shares, rights or options over ordinary shares in the Company granted to or exercised by key management personnel in the current year.

4.7 Options or Rights over Equity Instruments Granted as Compensation

There are no rights or options held by key management personnel, or their related parties as at 1 July 2022 through to 30 June 2023, other than those disclosed in Section 4.1.

5. KEY MANAGEMENT PERSONNEL TRANSACTIONS

5.1 Other Transactions with Key Management Personnel

There were no other transactions with entities associated with key management personnel in the year ended 30 June 2023 (2022: nil).

5.2 Movements in Shares

The movement during the financial year in the number of ordinary shares in the Company held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:

5.3 Movements in Options

The movement during the financial year in the number of options in the Company held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:

END OF REMUNERATION REPORT - AUDITED

Signed in accordance with a resolution of the Directors.

Perth

Western Australia

21 September 2023

PKF Perth

AUDITOR'S INDEPENDENCE DECLARATION

TO THE DIRECTORS OF SYNERGIA ENERGY LTD

In relation to our audit of the financial report of Synergia Energy Ltd for the year ended 30 June 2023, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

PKF Perth

Shane Cross

Partner

21 September 2023

West Perth,

Western Australia

Level 4, 35 Havelock Street, West Perth, WA 6005

PO Box 609, West Perth, WA 6872

T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au

PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation.

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The above Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(1) Capital raising costs include cash payments and the fair value of options granted to the underwriter.

The above Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CASH FLOWS

The above Consolidated Statement of Cash Flows is to be read in conjunction with the accompanying notes.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ABOUT THIS REPORT - OVERVIEW

NOTE 1 - REPORTING ENTITY

Synergia Energy Ltd (the "Company") is a for-profit entity domiciled in Australia. These consolidated financial statements comprise the Company and its subsidiaries (collectively the "Group" and individually "Group Entities"). Synergia Energy Ltd is a company limited by shares incorporated in Australia whose shares are publicly traded on AIM of the LSE. The Company's shares were also publicly traded on the ASX until its delisting from the ASX on 30 December 2022.

The Group is primarily involved in the exploration, evaluation, development and production of hydrocarbons.

Unless otherwise indicated, these financial statements are presented in Australian dollars ("$" or "A$"), which is the Company's functional and presentation currency (see Note 2(e)) and are rounded to the nearest Australian dollar.

Parent Entity Information

In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in Note 24.

NOTE 2 - BASIS OF PREPARATION

(a)  Statement of Compliance

The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian accounting standards, interpretations and other authoritative pronouncements of the Australian Accounting Standards Board ("AASB") and the Corporations Act 2001. The AASB include Australian equivalents of the international financial reporting standards adopted by the International Accounting Standards Board ("IFRS"). Compliance with the AASB ensures compliance with the IFRS.

The consolidated financial statements were authorised for issue by the Board of Directors on 21 September 2023.

(b)  Basis of Measurement

The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial assets and liabilities (including derivative financial liabilities) at fair value through profit or loss, share-based payment arrangements measured at fair value and the foreign currency translation reserve.

A number of the Group's accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for some measurement and/or disclosure purposes and where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(c)  Going Concern Basis

The Directors believe it is appropriate to prepare the consolidated financial statements on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.

The Group incurred a loss of A$5,382,902 (2022: A$2,061,924) and had cash outflows from operating activities of A$5,374,071 (2022: A$4,801,134). The Group also concluded the year with cash and cash equivalents of A$938,589 (2022: A$4,838,459), loans outstanding (excluding derivative liability component of convertible notes) of A$774,666 (2022: A$451,355), and derivative liabilities of A$1,050,334 (2022: A$nil).

The Group also requires further funding within the next twelve months in order to repay its loan balances, continue its exploration activities, progress the Cambay development and drilling programme, meet its ongoing administrative expenses, and for any new business opportunities that the Group may pursue.

The Directors believe that the Group will be able to secure sufficient funding to meet the requirements to continue as a going concern, due to its history of previous capital raisings, acknowledging that the structure and timing of any capital raising is dependent upon investor support, prevailing capital markets, shareholder participation, oil and gas prices and the outcome of planned exploration and evaluation activities, which creates uncertainty.

The Directors consider the going concern basis of preparation to be appropriate based on its forecast cash flows for the next twelve months and that the Group will be in a position to continue to meet its minimum administrative, evaluation and development expenditures and commitments for at least twelve months from the date of this report.

If further funds are not able to be raised or realised, then it may be necessary for the Group to sell or farmout its exploration and development assets and to reduce discretionary administrative expenditure.

The ability of the Group to achieve its forecast cash flows, particularly the raising of additional funds, represents a material uncertainty that may cast significant doubt about whether the Group can continue as a going concern, in which case it may not be able to realise its assets and extinguish its liabilities in the normal course of business and at the stated amounts in the financial statements.

(d)  Basis and Principles of Consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Synergia Energy Ltd (the "Company" or "parent entity") as at 30 June 2023 and the results of all subsidiaries for the year then ended. Synergia Energy Ltd and its subsidiaries together are referred to in these financial statements as the "consolidated entity" or the "Group".

Subsidiaries

Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other comprehensive income, statement of financial position and statement of changes in equity of the Group. Losses incurred by the Group are attributed to the non-controlling interest in full, even if that results in a deficit balance.

Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.

The list of entities controlled by the Group is contained in Note 23.

Joint Ventures and Joint Arrangements for Joint Operations

Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement.

The interests of the Group in unincorporated joint operations and jointly controlled assets are brought to account by recognising, in its consolidated financial statements, the assets it controls, the liabilities that it incurs, the expenses it incurs and the share of income that it earns from the sale of goods or services by the joint operations.

The interests of the Group in unincorporated joint operations and jointly controlled assets are contained in Note 25.

(e)  Currency and Foreign Currency Translation

The financial statements are presented in Australian dollars, which is the Company's functional and presentation currency. The functional currency of the Company's subsidiaries is United States dollars or Pounds Sterling.

Foreign currency transactions are translated into Australian dollars (or the respective functional currencies of the Group entities) using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using historical exchange rates or the average exchange rate which approximate the rates at the dates of the transactions for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity. The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.

(f) Critical Accounting Judgements, Estimates and Assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

A key assumption underlying the preparation of the financial statements is that the entity will continue as a going concern. An entity is a going concern when it is considered to be able to pay its debts as and when they fall due, and to continue in operation, without any intention or necessity to liquidate or otherwise wind up its operations.

Judgement has been required in assessing whether the entity is a going concern as set out in Note 2(c).

Other judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as listed below (and discussed in the respective notes as indicated below):

· Income tax - refer Note 5

· Trade and other receivables - refer Note 8

· Exploration and evaluation assets - refer Note 10

· Development assets - refer Note 11

· Plant and equipment - refer Note 12

· Provisions - refer Note 15

· Share-based payments - refer Note 22

(g)  Rounding of Amounts

The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest dollar, unless otherwise indicated.

(h)  Accounting Policies

Other than as listed in Notes 2(i) and 2(j), significant accounting policies that are relevant to the understanding of the consolidated financial statements have been provided throughout the notes to the financial statements. Accounting policies that are determined to be non-significant have not been included in the consolidated financial statements.

The accounting policies disclosed have been applied consistently to all periods presented in these consolidated financial statements and have been applied consistently by Group entities, except where there have been any changes in accounting policies.

Changes in Significant Accounting Policies

The Group has adopted all new or amended accounting standards, interpretations and other accounting pronouncements issued by the AASB that are effective for reporting periods beginning on or after 1 January 2022 and therefore mandatory for the current reporting period. The adoption of these accounting standards, interpretations and other accounting pronouncements did not have any significant impact on the financial performance or position of the Group.

Any new or amended accounting standards, interpretations and other accounting pronouncements issued by the AASB that are not yet mandatory for the current reporting period have not been early adopted.

Accounting Standards and Interpretations Issued But Not Yet Effective

A number of new or amended accounting standards, interpretations and other accounting pronouncements issued by the AASB (as applicable to the Group) are effective for reporting periods beginning on or after 1 January 2023, and are as follows:

The above new or amended accounting pronouncements are not yet effective, with early application permitted. However, at the date of authorisation of these financial statements, the Group has not early adopted the above accounting pronouncements in preparing these consolidated financial statements.

The Group has not yet assessed the impact of these new or amended accounting pronouncements, however, none of the above accounting pronouncements are expected to have a significant impact on the financial performance or position of the Group in the current or future financial periods.

(i) Current and Non-Current Classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification.

An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.

A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.

Deferred tax assets and liabilities (if any) are always classified as non-current.

(j) Goods and Services Tax ("GST") and Other Similar Taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

SYNERGIA'S RESULTS FOR THE YEAR

This section focuses on the results and performance of the Group.

NOTE 3 - OPERATING SEGMENTS

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components.

Operating segments are presented using the "management approach", where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ("CODM"). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

The operating segments identified by management are generally based on the geographical location of the business. Each segment has responsible officers that are accountable to the Chief Executive Officer ("CEO") (the Group's chief operating decision maker). The operating results of all operating segments are regularly reviewed by the Group's CEO to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

The Group's executive management team evaluates the financial performance of the Group and its segments principally with reference to revenues, production costs, expenditure on exploration evaluation and development costs. Financing requirements, finance income and expenses are managed at a Group level.

Corporate items include administration costs comprising personnel costs, head office occupancy costs and investor and registry costs. It may also include expenses incurred by non-operating segments, such as new ventures and those undergoing relinquishment. Assets and liabilities not allocated to operating segments and disclosed are corporate, and mostly comprise cash, plant and equipment, receivables as well as accruals for head office liabilities.

Major Customer

The Group's most significant customers are:

· Enertech Fuel Solutions Pvt Limited, with gas sales representing 58% of the Group's total revenues (2022: 100%); and

· Navkar Enterprise, with oil sales representing 42% of the Group's total revenues (2022: nil%).

Accounting Policies

a) Revenue

The Group recognises revenue as follows:

Revenue from Contracts with Customers

Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.

Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either the "expected value" or "most likely amount" method. The measurement of variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle are recognised as a refund liability.

Sale of Goods

Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is generally at the time of delivery.

Interest

Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Other Revenue

Other revenue is recognised when it is received or when the right to receive payment is established.

b) Expenses

The Group recognises expenses as follows:

· Amortisation - refer to Note 11

· Impairment - refer to Notes 10 and 11

· Depreciation - refer to Note 12

· Expected credit losses - refer to Note 8

· Employee benefits - refer to Note 15

· Leases - refer to Note 18